Police forensics officers on Friday evening remained at the scene, close to the Masons Arms pub in the Etherley Dene area, and a white tent has been put up next to a parked people carrier-type taxi.

Durham Police said the Independent Office for Police Conduct will investigate.

Durham Police later confirmed that a criminal investigation has been launched following the incident.

Chief Inspector Stephen Ball said: “Obviously, this is a serious incident and the public would rightly expect a thorough investigation.

“We are fully co-operating with the Independent Office for Police Conduct.

“We believe this to be an isolated incident and we would like to reassure residents that there is no wider threat to the public.”

A spokeswoman for the force said the investigation had been launched in relation to “the incident as a whole”, rather than a specific person.

A spokeswoman for the IOPC confirmed it was investigating the incident after being informed, by Durham Constabulary, that they received reports of a man carrying a firearm in Bishop Auckland.

She said firearms officers attended and the man was shot by an officer before being detained.

The type of weapon the man is reported to have been carrying is to be confirmed.

IOPC Regional Director Miranda Biddle: “Our investigators have visited the scene and attended the post incident procedures. What we do know, at this time, is that the man was in possession of what appeared to be a firearm when he was stopped by police; a police officer fired their weapon, the man was injured and treated in hospital. What appears to be a non-police issue firearm was recovered from the scene.

“We will now begin the process of looking at the circumstances of the shooting. Over the coming days we will identify key evidence, such as if there is any body worn video of the incident. We will also be analysing the initial accounts from the officers involved and we welcome their cooperation.”

A Durham Police spokesman said later: “A 23-year-old local man has been arrested and is being held at Darlington Police Station for questioning.”